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Chávez's oil largesse winning fans abroad

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Chávez's latest scheme, signed by London's leftist mayor Ken Livingstone on Feb. 20, will save the city $32 million a year. In return, London transport chiefs will visit Caracas next month to advise on traffic management and urban planning. "The agreement with Venezuela is to use the energy cost contribution to alleviate the impact of high energy costs for some of the poorest Londoners," says a spokesperson for Mayor Livingstone.

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But critics have questioned the logic of the deal. "I find it strange that the capital of a G-8 country is effectively receiving foreign aid from a poor country," says Richard Barnes, a Livingstone opponent in the Greater London Assembly. "Thirty-eight percent of [Venezuela's] people live below the poverty line and here [Venezuela] is subsidizing London's poor."

London joins a growing list of locales receiving Chávez largesse. Venezuela's oil has gone to at least 18 nations. Cheap oil is sent to needy Caribbean nations as part of Chávez's Petrocaribe initiative. Recently he pledged to send Nicaragua 10,000 barrels of discounted oil and oil products a day.

In its most obvious defiance against the US, Venezuela sends 100,000 barrels of oil a day to Cuba at subsidized rates. The projects go beyond oil. Venezuela gave Argentina $2.5 billion to pay off its debt to the International Monetary Fund (IMF) last year, and promised to help Bolivia to continue nationalizing key industries.

Programs strike a chord with the poor

Chávez's programs, especially in Latin America, have tapped into a widespread disenchantment with the free-market policies championed throughout most of the region in the past couple decades, a sentiment reflected by the recent electoral wins of Chávez allies, including longtime US foe Daniel Ortega in Nicaragua, Rafael Correa in Ecuador, and Evo Morales in Bolivia.

"I think that there has been significant erosion of US-Latin American dependence, psychological as well as actual dependence, on the US," says Birns.

Yet some say that his influence is overestimated. "He needs the US more than the US needs him," says Gal Luft, co-director of the conservative Institute for the Analysis of Global Security in Washington, an energy security think tank. "I don't think we should scare ourselves to death by what Hugo Chávez is doing," he says pointing out that Venezuela is the fourth biggest supplier of US crude imports.

An 'energy bribe'?

Mr. Luft dubs Chávez's moves an "energy bribe" and says that most leaders will leave his side when he runs out of money. "There is a great game going on now in Latin America, in which he is trying to pour a little oil money into every one of the chess squares," says Luft. "If someone offers you a gift, it's hard to turn down. Hugo Chávez does all kinds of things that make a lot of headlines but at the end of the day everyone knows who he is."

In fact, his popularity may have surged in pockets where residents are direct beneficiaries of his aid, but overall his popularity has not changed dramatically. According to a regional survey in late 2006 by Latinobarometro, a polling firm in Chile, respondents grouped Chávez, Cuba's Fidel Castro, and President Bush all as bad leaders.

Chávez's reputation also took a blow last fall when he failed to win a seat on the UN Security Council despite fierce lobbying, after he called President Bush "the devil" at the United Nations.

Michael Shifter, the vice president for policy at the Inter-American Dialogue in Washington who is coming out with a report this week on the challenges the Chávez administration poses to US policy makers, says that Chávez is able to point out what is wrong with Latin America, but his direction is not necessarily a solution. "He offers a seductive project, and his appeal is totally understandable. His gift is to tap into ... this resentment toward the US, which has a real basis," says Shifter. "But I don't think Chávez has an answer to the problems either."

Ms. Llana is Latin America correspondent for the Monitor and USA Today. Associated Press reports were used in this story.